Reversing a six-year downward trend, Main Street entrepreneurship rose in 2015 — with a boost from very small companies of fewer than 10 employees, according to an annual gauge of small business by the Kauffman Foundation. The entrepreneurship gains, however, appear short-term as activity overall remains below prerecession and historical levels.
For 2015, the Main Street Entrepreneurship Index came in at 0.07, which is above the historical average reading of zero. The index reading reverses a downward trend for small business activity that began in 2009 during the recession, according to Kauffman, which released the latest annual index Wednesday.
While Main Street ticked higher year over year, long-term trends don't look so encouraging, said Arnobio Morelix, senior research analyst at Kauffman. Over a long horizon, the trends are "mostly stagnant," he said.
For example, saddled with rising student debt, among other factors, the number of young business owners is declining. And across the board, the percentage of American adults owning businesses continues to fall compared to the 1990s.
Historically, Main Street entrepreneurs have been key drivers of local economies. Established small businesses make up 63 percent of all U.S. employers. But even with the Great Recession behind us, the Kauffman data suggests some pockets of entrepreneurs are trying to find their footing in the new economy.
"Despite the recent year increase, long-term trends of Main Street entrepreneurship do not look as encouraging," according to the report.